London

UK households positive about future finances for first time in eight months

UK households have turned positive about their future finances for the first time since November last year as wages continue to grow.

Financial health expectations for the next twelve months moved into the positive in June, according to the latest IHS Markit household finance index.

Read more: UK households set to spend £63.4bn on international travel by 2025

But current financial health perceptions remained negative as Brexit uncertainty lingered in the forefront of people’s minds.

Over the longer term households were more buoyant as workplace activity and incomes from employment continue to rise.

The future household finance index rose to 51.5 in June from 49.2 the previous month and above the neutral score of 50 for the first time since last November.

“If meaningful wage growth and a low and stable inflation environment can be sustained, this should support purchasing power gains for UK households,” IHS Markit economist Joe Hayes said.

“Indeed for the first time since November 2018, financial wellbeing expectations for the coming twelve months turned positive,” he added.

Despite rising expectations, job security remained negative for an eleventh consecutive month and employment income growth eased for a second month in a row.

Read more: UK household earnings rise at sharpest rate in a decade as spending ticks up

Households maintained the view that the Bank of England’s next move would see a rate increase, with 69 per cent expecting the hike to come in the next twelve months and 43 per cent anticipating a rise by the end of 2019.

But those predicting a cut on the horizon rose to nine per cent from 8.3 in May.

The post UK households positive about future finances for first time in eight months appeared first on CityAM.

Categories: City, London

Lufthansa profit warning hurts ‘miserable’ airline stocks

A Lufthansa profit warning dragged down airline stocks this morning as analysts warned investors are “spooked”.

The Frankfurt-listed flyer blamed overcapacity in the market and rival carrier competition for falling ticket prices in Europe.

Read more: Flybe boss to quit after airline’s sale to Connect Airways

Lowering its earnings margin forecast to between 5.5 per cent and 6.5 per cent, Lufthansa warned investors it would only rake in €2bn to €2.4bn in profit for 2019.

That compares to a previous forecast of 6.5 per and eight per cent margin on earnings before interest, tax, depreciation and amortisation (Ebitda), or €2.45bn to €3bn.

“Yields in the European short-haul market, in particular in the Group’s home markets Germany and Austria, are affected by sustained overcapacities caused by carriers willing to accept significant losses to expand their market share,” Lufthansa said.

“This is putting pressure on yields at the Network Airlines and Eurowings.” 

Lufthansa shares fell 12.2 per cent in early trading today to just €15.5 per share.

But the airline’s woes hit its rivals as the profit warning scared off investors already wary of widespread problems besetting an ailing sector.

Lufthansa’s woes hurt airline sector

Easyjet dropped 4.1 per cent to 890.8p per share while British Airways owner IAG fell three per cent to 446.6p.

“Shares in the airlines sector have been spooked by [Lufthansa’s] profit warning,” Russ Mould, investment director at AJ Bell, said.

“These factors are certainly not ‘new’ news and so the fact Lufthansa is still moaning would suggest life is getting even tougher for the airlines.”

So far this year the airline industry has seen higher fuel prices hit airlines including Ryanair, which issued a profit warning in May.

Meanwhile Thomas Cook is selling its airline unit in a bid to save the holidaymaker from administration.

And Flybe fell into the hands of a consortium bid led by Virgin Atlantic.

Flybmi collapsed into administration in February while Easyjet’s losses rose to £275m last year, as higher fuel prices bit the airline.

“Lufthansa’s Q1 loss was a red flag for the airline sector,” Neil Wilson, chief analyst at Markets.com, said.

“No signs that anyone is prepared to reduce capacity therefore we would anticipate the wave of consolidation in European short haul is not over.”

Since the start of 2019, IAG shares have plummeted 27 per cent, Easyjet’s are down 19 per cent, and Ryanair has fallen five per cent, according to AJ Bell.

Only Wizz Air and Jet 2 owner Dart Group have bucked the trend, delivering share price rises of 23 per cent and 15 per cent respectively.

Read more: Easyjet losses soar to £275m

“In addition to a price war and excess capacity across Europe, higher fuel prices and [Boeing’s] 737 Max grounding have added to the industry pressures, making 2019 a miserable year for airlines,” Mould said.

“It has also been a miserable place for investors to park their money, as illustrated by the year-to-date share price movements among London-listed airlines.”

The post Lufthansa profit warning hurts ‘miserable’ airline stocks appeared first on CityAM.

Categories: City, London

Staffline shares plunge after firm reveals £32.6m minimum wage hit

Shares in recruitment firm Staffline plummeted 28 per cent this morning after it revealed it took a £32.6m hit for failing to comply with National Minimum Wage regulations.

Staffline said liabilities from the historical non-compliance had risen from £7.9m to £15.1m including £500,000 of advisor charges.

Read more: Staffline on track for worst day in history as shares lose 50 per cent

Additional exceptional costs connected to audit procedures will be £1.8m, taking exceptional charges for the year to £32.6m.

The company said it was in talks with investors to raise £37m from a share issue to cut debt.

The non-compliance, which took place between 2013 and 2018, was related to “food production facilities and payment for preparation time”.

“These procedures have now been rectified so that all work related time is paid in accordance with current legislation,” the company said in a statement.

“Any additional time paid is charged to the customer in the same way as all other hours supplied.”

Staffline will announced its delayed results for the year to the end of December 2018 on 27 June.

Read more: Staffline startles investors with results delay

Chris Pullen, chief executive of Staffline, said: “Whilst the time taken to announce our 2018 financial results is frustrating, we look forward to posting these results at the end of June at which point we expect the business to return to normalised trading.

“Staffline continues to enjoy a unique position in its markets and once this episode is behind us we are confident of a return to future growth.”

The post Staffline shares plunge after firm reveals £32.6m minimum wage hit appeared first on CityAM.

Categories: City, London

Why the Square Mile must break its silence on China

If timing is everything, London’s stock exchange tie-up with China has been a disaster from the start.

It is now four years since the plan was first revealed under the Sino-philic leadership of David Cameron and his chancellor George Osborne.

Read more: London-Shanghai Stock Connect finally launches

Yet the summer of 2015 also brought a sharp bearish turn in Shanghai, compounded by a draconian clampdown from the Chinese state against so called “speculators” and journalists who faced absurd accusations.

Osborne doubled down on the idea, travelling to China weeks later to assure government officials and bourse bosses that the link-up plan would proceed “whatever the headlines, regardless of the challenges”.

Today the plan comes to fruition with the launch of the London-Shanghai Stock Connect, a system that grants China’s zealous investors access to shares listed here in the City.

It could also allow 260 or more “potentially eligible” Shanghai-listed companies to list in London.

Again, the timing must have had spin doctors and officials on both sides cursing their luck.

At the point of going to print late last night, pressure was intensifying on Hong Kong leader Carrie Lam to quit following the appalling, ill-judged and ultimately unsuccessful attempt to force through a Beijing-backed extradition bill that triggered dramatic protests in the former British colony.

So is the UK, and the City, right to push ahead with the scheme?

On the one hand, London is the world’s preeminent hub of financial sector expertise and as such it makes sense to forge connections with such a powerful, fast-growing economy.

Further, the cutting of economic ties is rarely a successful way of encouraging political reform in a foreign state. 

That said, our leaders, national and in the City, must recognise that it is no longer possible to claim that economic links and market forces automatically lead to political liberalisation.

The recent fiasco around the Lord Mayor’s show (from which Taiwan was blocked from participating following pressure from China) may seem trivial, yet it represents a significant question: in order to forge business and financial links with China, must we really offer support to its government’s often-objectionable positions and practices?

The answer is surely no.

The extension of markets and opening of trade routes must always be encouraged, but not at the expense of speaking out against the excesses of what remains a deeply authoritarian and undemocratic state.

This morning Phillip Hammond hosts China’s Vice Premier Hu Chunhua in the City to celebrate the stock market tie-up.

Read more: China’s industrial output falls to 17-year low

That this event takes place against the backdrop of the Hong Kong protests is a reminder of the complex and occasionally uncomfortable relationship between trade, diplomacy and politics.

The post Why the Square Mile must break its silence on China appeared first on CityAM.

Categories: City, London

Kier unveils plan to cut 1,200 jobs and strip back non-core businesses

Struggling construction firm Kier has revealed plans to cut 1,200 jobs and strip back its non-core businesses.

The outsourcer said it would sell or “substantially exit” non-core activities, including its housebuilding and facilities management units.

The turnaround programme, which follows a strategic review launched in April, will see the company focus on its infrastructure, utilities, highways and regional building divisions.

Shares in the outsourcer plunged more than 30 per cent on Friday on reports it was preparing to sell its housebuilding unit.

The outsourcer, which is listed as one of the government’s top external suppliers of public services has long been struggling with its finances.

Earlier this month Kier issued a fresh profit warning, saying its operating profit was expected to  be £25m less than previously forecast.

It also said its “Future Proofing Kier” turnaround programme would come in £15m over its original budget.

More to follow

The post Kier unveils plan to cut 1,200 jobs and strip back non-core businesses appeared first on CityAM.

Categories: City, London

Cut the obfuscation and let Britain move beyond Brexit

City of London News Stream by Cityam - 10 hours 19 min ago

Gone ’til November.

The lyrics of rapper, activist and one-time Haiti presidential candidate Wyclef Jean. And it is the view of the great many of those vying to be Prime Minister: while we might be in the EU until October, we will be gone by November.

You’d be forgiven for raising an eyebrow. Groundhog Day continues much as it has for the last three years. Or as our outgoing Prime Minister might say, “nothing has changed”.

Over at our friendly neighbourhood parliament the “yah boo” accusations and counter accusations continue, with no apparent end to the prevarication of our legislature.

For never in the field of human conflict have so many words been used to say so little. Never has it been more transparently obvious that beneath these weightless words hides the truth that parliament might have legislated for us to exit the EU, but in its heart it doesn’t want us to. And it can’t bring itself to say so.

The result is utter obfuscation that has led to further division. Heed the words of another great leader, Abraham Lincoln, who said that you can fool some people all of the time and all people some of the time, but you cannot fool all of the people all of the time.

Brexit Britain is the playbook for this. The lack of any real drive to commit to Brexit, one way or the other, has pitted parliament against the nation.

It’s quite something that, after decades of being accused of being woolly and indecisive, right now it is the Liberal Democrats in parliament who have taken a clear position that the nation really understands. Better off in and “bollocks to Brexit”.

In the meantime, both Labour and the Conservatives have spent three years blitzing us with waffle. Never mind the quality, feel the weight. If words were a measure of GDP, the UK would be the undisputed superpower of the world.

The rise of the Brexit Party has changed all that for the Conservatives. It is the harbinger of doom and it has given them the fright of their lives. The Peterborough by-election provided a chilling ghost of Christmas future: some 650 seats where anyone but the Conservatives could race through the middle to claim victory.

The fiercely urgent issue for one of the oldest political parties in the world is simply this: deliver Brexit or die. And if the leadership contest has done one thing, it has been to bring a much missing survival instinct to the fore.

But while for many Conservatives the moment of real clarity has finally come, parliament ambles on as before.

Welcome to filibuster, the smash hit of the summer. Expect any manner of delaying tactics, votes of confidence, and ancient procedural jiggery-pokery not seen since Henry II went full Tony Soprano by encouraging his knights to knock off a turbulent priest.

In the meantime, the noise bombardment will continue. Endless queues of politicians will take to the microphones to tell us, well, not very much at all.

It was Einstein who said that nothing changes until something moves, and the leadership contest represents that movement.

While many have been quick to criticise the number candidates, with them has come a diversity of thought and the sign of a very real debate not only about Brexit but about the future of the nation and the future of the Conservatives as a political force. One that goes beyond soundbites and policy paralysis.

So, buckle up and brace for impact. Because love it or loathe it, Brexit is getting closer and it’s coming to an economy near you.

No amount of anguished gnashing of teeth or lofty disdain will dissuade the new captain on the bridge of Number 10 to alter course. For aside from Rory Stewart, all the rest are like a heavy armoured flotilla bound for exit on the designated day, and even the slowest ship in the Brexit fleet speaks of delays in terms of moments.

Which brings us to the origin story and its consequences. David Cameron was the “nearly there” Prime Minister. He did many things right: he got the enterprise agenda moving and he mastered coalition government. But the referendum was the mess of his making and it is his legacy.

It has paved the way for the three of the most indecisive years in our nation’s history. On his last day in Downing Street, Cameron’s enterprise adviser, Lord Young, spoke to me about his work, saying, “we’ve got a good thing going as long as we don’t mess it up”.

But messing up has been the story of Brexit ever since.

So, for those that did or didn’t want the referendum in the first place; for those that did or didn’t want to leave but now accept the decision; for those that just want to get on with life – for them and many more, it’s time to put this mess right.

We need to know where we’re going as a nation. And we can’t afford to wait until November to do that.

The post Cut the obfuscation and let Britain move beyond Brexit appeared first on CityAM.

Categories: City, London

At a time of political flux, UK-US links have never been more important

City of London News Stream by Cityam - 10 hours 55 min ago

It was no surprise to see so much media scrutiny around President Donald Trump’s recent visit to Britain, and there is no doubt that the special relationship between the UK and the US will remain in sharp focus over the coming years.

Whatever form that relationship takes in the future, it’s impossible to ignore a fundamental truth: Transatlantic trade will continue to be an asset for both sides.

Amid all the talk of potential trade deals, it’s our responsibility to keep our eye on the ball.

The priority for us is simple – to continue building on the success story that is the trading relationship between our two countries in financial and professional services, as well as tech.

Together, we are already in a position of strength. We have more than £600bn invested in each other’s economies, while one million Americans work for British companies in the US and vice versa.

The UK is the world’s leading exporter of financial services, and while a fifth of our trade surplus in the sector was generated by the trade with the US, there are clearly still areas of untapped potential from which we can both benefit.

As I lead a delegation of some of the world’s most exciting fintech startups to Chicago and Atlanta next week, as part of my second visit to North America as lord mayor, I will be looking ahead to the future to understand how we can further collaborate.

We have plenty to offer as a leading global hub for innovation and as the home to more than a tenth of the world’s fintech industry.

Partners there are interested to know more about how we can share expertise in emerging areas of the industry.

In Atlanta, for example, where more than 70 per cent of payment transactions are handled globally, there is an opportunity together to find ways of streamlining operations and improving customer experiences through new technology.

Meanwhile in Chicago, I’ll be meeting representatives from Aon – the world’s largest insurance broker – who want to know how UK insurtech can help them to futureproof the sector and produce an offer to consumers which is both smarter and more efficient.

There are, of course, questions about the global framework within which our financial services trading relationship will operate. Our policy chair Catherine McGuinness has visited both Washington and New York in recent weeks, where she has been building consensus for continued regulatory cooperation for the years to come.

In the meantime, though, the appetite from across the Atlantic to collaborate with the UK’s financial services sector has never been greater.

While other issues have been the focus of media attention, London has gone about positioning itself at the forefront of the emerging trends in technology that will maintain and cement its status as a global financial leader.

At a time of political flux, the partnership between the US and the UK remains as important than ever.

The post At a time of political flux, UK-US links have never been more important appeared first on CityAM.

Categories: City, London

DEBATE: Is social media’s bad reputation retrievable?

City of London News Stream by Cityam - 11 hours 30 min ago

Is social media’s bad reputation retrievable?

Sophie Scott, global managing director of FleishmanHillard’s tech practice, says YES.

While technology has improved our lives in many wonderful ways, significant scandals and perennial privacy issues have deeply tarnished social media companies’ reputations.

But has trust been lost forever? Absolutely not. Despite the criticism, stats don’t lie, and sign-ups and ongoing use have continued apace. Social media is an aspect of people’s daily lives that is here to stay.

That said, rebuilding trust must be an absolute priority. This means addressing the problem’s root cause: users don’t believe that social media companies are working in their interests. Our research shows that 75 per cent of Brits want more action regarding these companies’ impact on society. They want to redefine their relationship with social media, not end it.

The best remedy will be for social media companies to work with the government, regulators, academia, and each other, and to behave in ethical, socially responsible ways. To rebuild their reputations, they must do not only the most profitable thing, but the right thing, for all stakeholders.

Peter Murray, director of corporate affairs at Cicero Group, says NO.

If you fancy a career change, consider becoming a therapist. It will be a boom industry when our kids reach adulthood; a generation that measures self-worth in “likes” and shares intimate photos with each other in the belief that they will simply disappear.

A growing number of Silicon Valley titans are now distancing themselves from the Frankenstein they’ve created. Many have started to talk publicly about the harm that their social media creations could be having on young people, while whipping smartphones out of their own kids’ hands faster than if they were lit cigarettes.

Last week, the charity Barnardo’s published a report revealing that children as young as two were accessing social media. The report also noted that 78 per cent of vulnerable 11-to-15-year-olds had been exposed to harmful content, including cyber bullying, grooming, and the sharing of “personal content”.

The industry is getting its defensive lines in early and governments are waking up to the threat at grinding speed. But as more young people emerge from behind their screens into society, prepare for the sector’s reputation to go from bad to worse.

The post DEBATE: Is social media’s bad reputation retrievable? appeared first on CityAM.

Categories: City, London

Cameron Norrie interview: British No2 on his form, Olympic dream and Queen’s and Wimbledon hopes

City of London News Stream by Cityam - Sun, 06/16/2019 - 19:49

Andy Murray may have been kept out of picture by injury but recent months have been a pretty positive time for British men’s tennis.

Kyle Edmund, Cameron Norrie and Dan Evans have been flying the flag high in Murray’s absence, with all three currently on the up and inside the top 70 of the world rankings.

With Murray about to test his newly resurfaced hip on the doubles court, the British singles focus for the grass court season, which starts tomorrow at Queen’s Club, will be on a trio of talents.

Read more: Murray will struggle to get back to his best after injury, says hip expert

They may be primarily focused on their own game, but spending time on tour with each other, practising regularly and playing together in the Davis Cup has helped form a close bond between the group.

It’s a positive atmosphere to be a part of – and hard-hitting left-hander Norrie believes the mutually beneficial environment is a significant factor in the overall upturn.

“It’s nice to have other guys around pushing us and having them on our tails,” the British No2 tells City A.M. “Honestly, I just want the best for those guys and it pushes me to want to do better, when you see your friends doing well. You want to do just as well as them.

“I haven’t seen Andy too much with the injury, but it’s nice to see him back. I hit with Kyle on Thursday and I see him around. I’m probably the closest with Dan Evans, who has just come back. I played doubles with him at the French Open. We have a lot of competitive practises and we get along very well.”

Norrie has taken a lot from his experiences playing for Great Britain in the Davis Cup

Having come through the American college tennis system when studying sociology at Texas Christian University, Norrie feels at home in a team dynamic.

His biggest breakthrough came in a team setting, too, with his first taste of the Davis Cup proving to be a perfect one. Norrie – then ranked No114 in the world – showed guts and talent to fight back from two sets down to beat Spain’s then-world No23 Roberto Bautista Agut at home and on his preferred clay surface in February 2018.

Olympic dream

Now established and much improved following a whirlwind first two years as a professional, the world No50 has set his sights on a place in Great Britain’s squad for the 2020 Olympics in Japan.

“I’d love to play at the Olympics and I think it’d be pretty special to be there, learning from other athletes, seeing what they’re doing and being amongst the best in the world,” the 23-year-old explains.

Norrie is close friends with Dan Evans

“It’d be nice to have peers around you who want the best for you and the camaraderie of having other players and athletes around you – it’d be amazing, definitely something I’d cherish for the rest of my life if I get to experience it.”

This is an exciting period for Norrie. He started 2019 by reaching his first ATP final at the Auckland International, losing to Tennys Sandgren, before climbing up the rankings to a career-high 41 in May through sustained solid form. And although he endured a poor French Open, losing in the first round to world No273 Elliot Benchetrit last month to slip back to No50, overall he feels he made a great deal of progress on clay courts.

Wimbledon motivation

Considering he was merely the top-ranked male college tennis player in the US two years ago and only turned professional in June 2017, it’s been a meteoric rise to his current position.

“If you told me two years ago that I’d be ranked where I am right now I would have taken it,” he says.

“Honestly there have been lots of ups and downs. There are so many more ways to go for me in tennis – there are still 45 guys in the world who I want to get better than. It’s going to be a long process but I’m excited and I feel really motivated and driven.”

Norrie was beaten in the first round of the French Open

With his form “really good”, Norrie is excited to make the switch to the grass courts. He faces a tough first-round tie at the Fever Tree Championships against the big-serving world No8 Kevin Anderson tomorrow afternoon, but it’s a few miles down the road at Wimbledon, where he is yet to win a match, where the biggest motivation lies.

“I don’t really mind too much about how far I go [at Queen’s],” Norrie says. “I just want to compete as hard as I can and just improve and learn from whatever happens this week, and hopefully take some confidence heading towards Wimbledon, because that’s the main focus as the bigger tournament.

“It’s a grand slam, a huge tournament, with so much history there, so it’s pretty special for me. I’m healthy, feeling confident and I’m hitting the ball so well in practice, so I’ve taken care of the preparation side of things.”

After making huge strides in the last two years, this summer could be the one when Cameron Norrie becomes a household name.

New Tennis for Kids London courses start from Monday 17 June. To find out more and to sign up to a local course visit www.lta.org.uk/play-compete

The post Cameron Norrie interview: British No2 on his form, Olympic dream and Queen’s and Wimbledon hopes appeared first on CityAM.

Categories: City, London

Group behind Canary Wharf launches bid for transport giant Arriva

City of London News Stream by Cityam - Sun, 06/16/2019 - 18:21

Brookfield Asset Management, the investment vehicle behind Canary Wharf, has launched a bid for transport giant Arriva.

It is understood that the German rail giant is seeking between £4bn-£4.5bn for Arriva, which was put up for sale by owner Deutsche Bahn in March in a bid to reduce its €20bn debt pile.

Read more: Arriva joins Stagecoach in taking government to court over East Midlands franchise decision

Brookfield is reported to be working with Goldman Sachs and I Squared Capital on the bid, the Sunday Telegraph reported.

Other bidders vying for Arriva, which operates the struggling Northern franchise as well as London Overground, include the Carlyle Group, French firm Keolis and Apollo Global Management.

A spokesperson for Deutsche Bahn said: “We have started a dual track process and explore the option of selling up to 100 per cent of the shares in Arriva to one or more investors, and the option of an IPO. The process started off well with many parties having expressed their interest. As the dual track process continues over the next months we do expect more substantiated feedback.”

Deutsche Bahn is expected to announce the winner bidder later in the autumn.

Read more: Rail passenger journeys soared to a record 1.8bn over past year

Deutsche Bahn bought Arriva for just £1.5bn in 2010, when the firm had revenues of £1.7bn.

A spokesperson for Carlyle declined to comment. Goldman Sachs declined to comment. The other bidders did not respond to requests for comment.

The post Group behind Canary Wharf launches bid for transport giant Arriva appeared first on CityAM.

Categories: City, London

Hargreaves Lansdown raised concerns about suspended Woodford fund as early as 2017

City of London News Stream by Cityam - Sun, 06/16/2019 - 18:16

Hargreaves Lansdown raised concerns about the performance of the Woodford Equity Income Fund more than two years ago, but continued to recommend it to its customers.

The investment adviser was also selling millions of pounds in stock in the fund, according to analysis by the Sunday Times.

The Woodford Equity Income fund was frozen earlier this month after a run of redemptions that meant it was struggling with liquidity.

Since the suspension the fund, run by stock picker Neil Woodford, has been selling stakes in a range of companies and seeking to reduce its exposure to illiquid unlisted stocks.

Hargreaves Lansdown first raised concerns about the performance of the fund more than two years ago, The Sunday Times reported, but only told customers of its concerns more recently.

On 5 June, Hargreaves Lansdown’s chief investment officer Lee Gardhouse said: “We’ve been speaking to Woodford for some time about the number of unquoted and hard-to-trade companies in his portfolio.”

Hargreaves Lansdown sold 12.4m units of Woodford stock in four of its multi-manager funds between March 2017 and March 2019, while its total holdings across two other funds grew 2.7m.

In total, the value of its holdings in the equity income fund fell by £189m over the period. It still has about £610m in the fund.

Emma Wall, head of investment analysis at Hargreaves Lansdown, said: “Our multi manager funds are actively managed and deals are placed depending on a range of factors including asset allocation decisions, new investment opportunities, and fund flows into and out of the multi manager portfolios.

“We’ve held Woodford in our HL MM Income and Growth fund since 2002, and during that time the amount held has varied. Until we removed it last week, Woodford Equity Income was part of our Wealth 50 list of favourite funds. It remains one of 60 funds in our Multi Manager portfolios.”

Regulator the Financial Conduct Authority has been criticised by figures such as ex-City minister Paul Myners for failing to act on signs Woodford’s fund was in trouble.

However, City veteran David Buik said it was not the regulators job to oversee the performance of Woodford and his colleagues.

“It cannot be the job of the FCA to keep tabs on the quality of Mr Woodford’s stock picking or that of his colleagues. When an individual or a pension fund buys into an investment, there is no guarantee of a capital gain. Frankly, investors ‘live by the sword, therefore they must be prepared to die by the sword!’” Buik said.

The post Hargreaves Lansdown raised concerns about suspended Woodford fund as early as 2017 appeared first on CityAM.

Categories: City, London

Labour mulls new tax on parental gifts that could raise £15bn

City of London News Stream by Cityam - Sun, 06/16/2019 - 17:40

A report commissioned by the Labour Party has recommended replacing inheritance tax with a lifetime tax on all gifts from parents to their children above £125,000.

The new tax could raise £15bn in 2020-21, £9.2bn more than the current inheritance tax system.

Under the proposals, tax would be levied on gifts received above a lifetime allowance of £125,000.

When this limit is reached, any income from gifts would be taxed annually at the same rate as income tax.

The report said Labour’s plans to remove inheritance tax breaks for main residences is an “important interim step”.

It also recommends the introduction of a tax for equity withdrawals, which is a “key means of avoiding inheritance tax”.

The plans are outlined in a report commissioned by Labour leader Jeremy Corbyn proposing “radical but practical changes in the way land in the UK is used and governed”.

Its author, environmental journalist George Monbiot, recommends introducing conditional exemptions for business and agricultural property which would be deferred until the asset is sold or the business ceases to be a trading entity and becomes an investment entity.

“This would allow families to maintain the integrity of agricultural land or business assets, but would also prevent inheritees from gaining large tax-free windfall gains,” the report said.

The post Labour mulls new tax on parental gifts that could raise £15bn appeared first on CityAM.

Categories: City, London

Football’s coming home to the City for the Square Mile’s unofficial club, the Honourable Artillery Company FC

City of London News Stream by Cityam - Sun, 06/16/2019 - 17:31

You could be forgiven for not realising it, but the City of London has its own football club which dates back to the 1800s and is among the leading lights of the amateur game.

One reason you might have missed it is because red tape has seen them exiled from the Square Mile for two decades and forced to play home games in Dulwich Village instead.

But that is about to change. Next season the Honourable Artillery Company’s teams are due to return to their historic base of Armoury House, just a long throw-in away from Finsbury Square.

Read more: From desk job to breaking the World Marathon Record

“We are very excited about playing at Armoury House again,” Charles Randall, president of the HAC football club, tells City A.M. “It’s as though the City’s football team is coming back to its natural home.”

While the HAC itself is the second oldest regiment in the world, predated only by the Vatican Swiss Guard, and now part of the Army Reserve, its football players are no longer drawn from the military.

Instead they are almost exclusively City workers from some of the biggest firms in banking and financial services.

Star striker Tom Coulter, who scored 17 times in 19 appearances last season, and full-back Ben Harper work for Barclays; midfielders Lewis Treacy, Tom Farrar, Joe Weston and Benji Thompson have jobs at Rothschild, Linklaters, Deloitte and RBS respectively; and outgoing captain Dave Holmes is at Merril Lynch.

Grimsby Town manager Michael Jolley is their most distinguished old boy, having played for – and cut his coaching teeth with – HAC while working as a fixed income trader in the City around the turn of the century.

The Honourable Artillery Company Football Club plays against a backdrop of the City of London’s distinctive skyline.

BBC presenter Chris Hollins – the son of former Chelsea midfielder and manager John – also played for HAC having, like Jolley, previously excelled at university level.

Arsenal and England centre-forward turned broadcaster and writer Alan Smith, meanwhile, is patron of the HAC’s two teams. “There is no chance of a playing comeback, however much we might need him,” jokes Randall, 70.

Rich sporting tradition

The HAC first XI plays in the Premier Division of the Amateur Football Combination, the London and Home Counties outpost of the top tier of the non-professional game in the UK where the standard is comparable to some semi-professional sides.

They have been runners-up on three occasions since the league was formed 15 years ago and have two cup wins in the last decade.

Last season they finished fourth of 10 teams in a division won by Old Hamptonians, who count former Manchester United defender – and son of ex-Old Trafford chief executive David – Oliver Gill, now also at Deloitte, among their number.

The second XI have climbed to just one rung below their colleagues, having achieved promotion to Senior Division One last term.

Several of the squad had spells in the academies of Football League clubs – Holmes at Nottingham Forest, Treacy at Blackburn and new skipper Alex Roberts, who works in sports marketing for Pentland Brands, at Coventry – while Coulter and Roberts were among four HAC players to be selected for the Combination representative XI last year.

Grimsby Town manager Michael Jolley played for the HAC FC when he worked as a trader in the City

The teams are continuing a rich and long-standing tradition at the HAC, which also boasts cricket and rugby teams dating from the 18th and 19th century respectively.

The five acres of Artillery Green have been used for sports such as archery since about 1660, while a member of the regiment, Cowper Jackson, is credited with helping to codify the laws of association football in 1863.

More recently, the HAC’s rarefied grounds have hosted occasional pre-season rugby matches for Premiership champions Saracens.

New players wanted

Football has been banished from the HAC for almost 20 years, however, after construction work on an underground car park and the erection of a winter marquee left insufficient space for a pitch that met minimum size requirements.

Some lateral thinking and minor landscaping by groundsman Bob Mills have made room for a football field again, paving the way for the teams’ long-awaited return this autumn.

Mills has taken the precaution of installing a high stop net behind the goal at the Bunhill Road end, though, after a window in his flat was smashed by one wayward shot.

While these are exciting times for Randall, like many of his equivalents in the professional game he now finds himself preoccupied with the summer transfer market.

The relocation away from London of forwards Tommy Riddell and Dayo Olufemi, who scored 22 in 16 for the second XI last term, has left the HAC short of forward talent and on the lookout for new signings.

“We are excited about moving back to the pitch in front of Armoury House but the loss of two of the club’s best three strikers is a major worry,” adds Randall, who encourages interested players to get in touch via the HAC’s website.

“As president, my aim is that the players enjoy their football – as I did about a million years ago – and improve individually. The results matter less, but there is a lot of talent in the club.

“The players are well aware the HAC sports badge means something special. The current group are a credit to the company.

“They set high standards with style. That is what the HAC establishment has been about for hundreds of years.”

The post Football’s coming home to the City for the Square Mile’s unofficial club, the Honourable Artillery Company FC appeared first on CityAM.

Categories: City, London

Rory Stewart makes ‘offer’ to work with Nigel Farage to deliver Brexit

City of London News Stream by Cityam - Sun, 06/16/2019 - 15:30
Rory Stewart wants to be the next Prime Minister

Tory leadership hopeful Rory Stewart has said he would work with Nigel Farage’s Brexit party to ensure that Britain’s withdrawal from the EU is delivered.

The international development secretary, who is one of six candidates jostling to replace Theresa May as leader, told Farage that parliament “has to find a route” to deliver Brexit. “Which is why I want to make an offer to you,” he added.

Speaking directly to Farage on LBC, Stewart said: “You represent such an important part of this debate, your results in these elections, the fact you actually lead us out of Europe in the first place puts you in a very important position in this.

“We need to find a way, as a party, of reaching out to you, and trade unions and other people who care about our economy, but we must reach out to you and bring you in to try to work out how we crack this, how do we get this through parliament.

“Because the thing that’s frustrating me with Boris, is that he just keeps asserting again and again that he’s going to leave on 31 October and he never tells us how he’s going to do it.”

Boris Johnson, the current frontrunner in the race, has ruled out working with Farage, saying the Brexit party leader needed to be “put back in his box”.

The post Rory Stewart makes ‘offer’ to work with Nigel Farage to deliver Brexit appeared first on CityAM.

Categories: City, London

SFO drops probe into how it handled ENRC investigation

City of London News Stream by Cityam - Sun, 06/16/2019 - 15:00

The Serious Fraud Office is dropping an inquiry into its handling of an investigation into former London-listed miner ENRC.

Sir David Calvert-Smith has been asked to abandon his work after being appointed to head the independent inquiry last year, the Sunday Times reported.

The SFO dropped the inquiry after ENRC decided to sue it for £70m.

It claims the court case will cover much the same ground as the inquiry was likely to touch on.

ENRC, which was on the FTSE 100 before de-listing in 2013, has alleged wrongdoing in the case.

It claims investigators have mishandled evidence and privileged information.

It said the investigation has “damaged” its reputation and caused losses.

Last year ENRC claimed victory after the Court of Appeal overturned a High Court decision which forced it to hand over the results of an internal investigation to the SFO.

In 2010 a whistle blower alleged corruption at a Kazakh subsidiary of ENRC.

The SFO launched a criminal investigation into the claims in 2013. Just months later ENRC de-listed from the London Stock Exchange.

The SFO declined to comment. City AM could not reach ENRC for comment.

The post SFO drops probe into how it handled ENRC investigation appeared first on CityAM.

Categories: City, London

Serco tried to merge with struggling Babcock

City of London News Stream by Cityam - Sun, 06/16/2019 - 14:23

Outsourcing giant Serco has tried twice to merge with its considerably bigger rival Babcock as they both grapple with a tough industry.

Serco’s chair, Sir Roy Gardner, reportedly contacted Mike Turner, who heads Babcock’s board, at the end of 2018.

Turner rejected the proposal, the Sunday Times reported.

However, this did not stop Serco from coming back with a more detailed proposal to merge the two London-listed firms in January.

Its all-share deal would have created a £4bn giant chaired by Gardner.

Serco is a part-owner in the UK’s nuclear bomb factory in Aldermaston, while Babcock is one of the largest suppliers to the Ministry of Defence. It has contracts in the billions with the MoD.

Earlier this month Babcock outlined plans to increase it profit growth by three to four per cent in the next half a decade.

Its shares have taken a massive beating in the last year, not least after dealing with a mysterious anonymous analysts’ note.

Shares, which were at 847p in June last year, closed at 465p on Friday.

Babcock hopes to grow in part through foreign expansion, increasing overseas revenue from 30 to 40 per cent of the total.

It came after the company cut its outlook in May, showing that operating profits slumped by nearly half.

Analysts called for change at the top of the company after the news.

“With profits up every year since 2015 and the share price more than halving, something has to give,” said RBC Capital Markets analyst Andrew Gibb.

Serco and Babcock declined to comment.

The post Serco tried to merge with struggling Babcock appeared first on CityAM.

Categories: City, London

Credit Suisse prepares to sue HMRC over tax on bonuses

City of London News Stream by Cityam - Sun, 06/16/2019 - 13:39

Lawyers representing Credit Suisse are preparing for a battle to reclaim more than £200m from the taxman over bankers’ bonuses.

The bank was forced to pay a 50 per cent tax on bonuses above £25,000 in 2010.

However, it is now looking to claim back at least £239m, claiming the temporary tax unfairly affected its business, the Sunday Times reported.

The tax was charged on bonuses paid out between December 2009 and April 2010.

In court documents seen by the newspaper Credit Suisse claims that the tax was “unlawful” applied and against EU rules.

It is claiming back the tax money, and added damages.

The tax forced the bank to cut bonuses for its 400 London bankers by 30 per cent in 2010.

HMRC and Credit Suisse both declined to comment.

The tax was introduced after the financial crisis amid a public outcry over perceived excesses in the banking sector.

After leaving office, Darling admitted that the so-called supertax on bankers’ bonuses had failed.

“I think it will be a one-off thing because, frankly, the very people you are after here are very good at getting out of these things and . . . will find all sorts of imaginative ways of avoiding it in the future,” Darling said at a 2010 conference in remarks reported by the Financial Times.

The post Credit Suisse prepares to sue HMRC over tax on bonuses appeared first on CityAM.

Categories: City, London

Second home ownership soars towards the value of £1 trillion

City of London News Stream by Cityam - Sat, 06/15/2019 - 12:32

The number of British people owning a second home has soared by more than 50 per cent since 2001 as the value of additional property wealth nears £1 trillion, according to a new report.

Research from think tank the Resolution Foundation revealed that 5.5 million people – around one in ten of the UK population – own a second home, buy to let or overseas property, up from 3.6 million in 2001.

Read more: UK house prices grow at fastest rate in two years despite uncertainty

The jump was driven by buy to let mortgages, which have risen 15 times since the turn of the century.

Wealth from second homes owned by UK adults has also risen over the same period to £941bn.

It found that while 50 per cent of people born in the 1960s owned a property by the age of 29, that dropped to 37 per cent among those born in the 1980s.

One in six baby boomers – 1.2 million people born in the 1950s – reported owning extra property, the data from 2014 to 2016 revealed.

Despite the surge in second home ownership, the number of millennials owning a home continues to fall.

The report urged policymakers to rebalance the housing market to help first-time buyers.

Read more: London housing market rebounds slightly after Brexit delay

Resolution Foundation policy analyst George Bangham said: “While young people in particular are less likely to own their own home than previous generations, those that do own are more likely to have more than one property.

“And as the huge stock of second homes, buy-to-let and overseas properties starts to be passed on to younger generations, Britain risks becoming a country where getting ahead in life depends as much on what you inherit, as what you earn.”

The post Second home ownership soars towards the value of £1 trillion appeared first on CityAM.

Categories: City, London

UBS economist must ‘pay the price’ over Chinese pigs comment, state media says

City of London News Stream by Cityam - Sat, 06/15/2019 - 11:06

Chinese state media has warned UBS economist Paul Donovan must “pay the price” over remarks he made referencing Chinese pigs.

The Swiss banking giant apologised earlier this week after its global chief economist’s comments sparked outrage in China.

Read more: UBS apologises after economist’s ‘Chinese pigs’ comment sparks public outrage

Donovan made the comments in reference to a rise in Chinese consumer prices, which has been driven by surging pork prices after an outbreak of swine fever.

In a morning audio note he said: “Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China – it “does not really matter to the rest of the world.”

UBS apologised for the “innocently intended” comments and put the economist on leave.

“Whether or not Donovan was fired is still unknown, but those who insult Chinese people must pay the price,” the People’s Daily, the newspaper of China’s Communist Party, said in a commentary last night.

“Otherwise, relapses will be inevitable, and would-be offenders will be incentivised to do the same,” the newspaper warned.

The Chinese Securities Association of Hong Kong also rejected the apology and demanded the economist be sacked by UBS.

State-run news platform Global Times reported that the economist used “distasteful and racist language” to analyse China’s inflation.

Read more: UBS shareholders revolt over €4.5bn French tax fraud fine

Last year, Italian luxury brand Dolce & Gabbana also got into hot water over Chinese culture.

The fashion house caused an uproar after one of its advertisements showed a model of East Asian ancestry struggling to eat pizza with chopsticks.

The post UBS economist must ‘pay the price’ over Chinese pigs comment, state media says appeared first on CityAM.

Categories: City, London

Hong Kong leader suspends extradition bill after mass protests

City of London News Stream by Cityam - Sat, 06/15/2019 - 10:19

Hong Kong leader Carrie Lam has indefinitely delayed a controversial extradition bill following mass protests.

The proposed law, allowing extraditions to mainland China, were met with Hong Kong’s biggest street protests in decades.

Read more: MPs urge China to respect Hong Kong freedoms after protests turn violent

Earlier this week, police fired tear gas and rubber bullets at demonstrators, who fear that the law could target political opponents of Beijing and undermine the principle of “one country, two systems” that has allowed Hong Kong to have its own laws.

The system, which was enshrined in the Sino-British joint declaration that guaranteed sovereignty to China in 1984, also promised that the way of life in Hong Kong would remain unchanged for at least 50 years.

After days of protests, which turned violent, Lam announced the proposed bill had been suspended.

“After repeated internal deliberations over the last two days, I now announce that the government has decided to suspend the legislative amendment exercise, restart our communication with all sectors of society, do more explanation work and listen to different views of society,” Lam said in a news conference.

The law would permit extradition requests from authorities in mainland China,Taiwan and Macau for those accused of crimes such as rape and murder.

Read more: G20 statement swerves calls to end US-China trade war

Critics feared that such a change would have diminished the city’s judicial independence and expose its citizens to China’s very different justice system.

Foreign secretary Jeremy Hunt had urged the Hong Kong government to listen to the “clear sign of significant public concern.”

The post Hong Kong leader suspends extradition bill after mass protests appeared first on CityAM.

Categories: City, London

Pages